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Trudeau reportedly pressuring India against reform of ISDS provision

Justin Trudeau and Narendra Modi

Justin Trudeau and Narendra Modi

It appears that the Trudeau government is pressuring India on its proposed reform to the controversial investor-state dispute (ISDS) mechanism.

Embassy reports, “Negotiations on the Canada-India foreign investment promotion and protection agreement, or FIPA, technically concluded in 2007, but the deal was never signed. India’s government put the brakes on any foreign investment agreements that included investor-state arbitration mechanisms in 2013. Canada’s government listed negotiations on the India FIPA as ‘concluded’ as recently as Oct. 16, archived copies of a Global Affairs Canada website show, but the same page now lists the talks as ‘ongoing’. …The move comes weeks after India released its ‘model’ for negotiating investment treaties going forward.”

The article adds, “The Model BIT requires investors to pursue disputes in domestic courts for at least five years before moving on to international arbitration.”

But it could be that the Trudeau government is unwilling to accept this.

Embassy notes, “The Hindu newspaper reported last month that Canadian officials had frozen the ongoing [free trade] talks until it agreed to sign the FIPA. The Hindu cited an unnamed official as the source of this information.”

The Hindu had reported, “Canada, the sources said, had pulled back its team that was negotiating India on the FTA — officially called the Comprehensive Economic Partnership Agreement — and asked them instead to focus on completing the ratification process of the Trans-Pacific Partnership [of which India is not a member]… Simultaneously, Canada — citing demands from investors, especially from the financial services sector, for protection of their rights — wanted India to first ensure that the bilateral Foreign Investment Promotion and Protection Agreement (FIPA) is signed and brought into force, before proceeding with the FTA talks.”

Notably, the Hindu also highlights, “It is learnt that Canada has differences with India regarding clauses in the proposed FIPA including on the Investor-State Dispute Settlement (ISDS) mechanism. In case of any dispute, India wants investors to exhaust the domestic remedies before approaching international tribunals. But Canada is worried about judicial delays in India and wants flexibility to help investors approach international tribunals at the earliest. Also, Canada wants India to ensure protection of investment commitments made based on existing policies in case any roll-back/changes in those policies later hurt those investment plans.”

On Jan. 5, the Globe and Mail reported, “Trudeau plans to lead a high-level trade mission to China and India, likely in March… For years, Canada has been pursuing a free-trade deal with India. The most recent talks were held last March. Planning for the trade mission is in its early stages, but the government has not ruled out a Team Canada mission including provincial premiers and territorial leaders and Canadian corporate executives.”

In Nov. 2010, the Toronto Star reported that the Harper government wanted a free trade agreement with India to increase exports of “forest products, minerals, manufactured goods, agricultural products, fish and seafood products, machinery, construction materials, aerospace and environmental technologies”. In Oct. 2012, the Globe and Mail reported Canada could export “oil, gas [including liquefied natural gas] and expertise in development of energy infrastructure such as hydroelectric transmission”. And in April 2015, the newspaper reported, “There is also talk of a deal that would see Saskatchewan-based Cameco Corp.. resume Canadian exports of uranium to feed India’s nuclear reactors.”

It has also been reported that ONGC Videsh Ltd., the overseas arm of India’s biggest state-owned energy explorer, has stated that the Energy East pipeline “would be of natural interest to us”. And in Oct. 2013, India’s high commissioner to Canada stated, “If Canada can take steps to bring oil and gas toward East Coast tidal ports, investors from India will be there to help with required investment”.

Concerns have also been expressed about the Indian prime minister’s human rights record.

In April 2015, more than 200 people protested against the Indian prime minister when he visited Vancouver. At that time, the Globe and Mail reported, “The protesters’ signs carried slogans such as ‘Human rights before trade deals’… Community organizer Mustafa Alam said the protest was fuelled by what he described as Mr. Modi’s discrimination against religious minorities. …Several signs [at the protest] referred to the anti-Muslim riots in Gujarat in 2002 in which more than 1,000 people, mainly Muslims, were killed by mobs when Mr. Modi was the state’s chief minister. Several human rights groups have accused Mr. Modi’s government of indifference as the killings spread.”

Further reading
Modi approves increased height for Sardar Sarovar Dam (July 3, 2014)